TEXT OF INTERVIEW
Scott Jagow: Economics has been called “the dismal science” but who says is has to be gray and boring? In fact, there’s a whole genre of books that tries to connect economics to our daily lives. The latest one is called “The Economic Naturalist” by econ professor Robert Frank. It looks at confounding little questions through an economic lens. For example, why is there a light in your refrigerator, but not in your freezer? Alright, Robert, let’s start with that one.
Robert Frank: OK that’s true about most refrigerators and the cost-benefit principle says you should do something if the benefit exceeds the cost. Here the cost of putting a light’s the same in either compartment. Since you open the refrigerator many, many times more than the freezer, the benefit of having a light there is just much greater.
Jagow: Alright cost-benefit. Now how about this one: Why are some fuel doors on the driver’s side of the car and some on the passenger side?
Frank: The fact that when you rent a car you don’t know where the gas filler door is, is one of the great annoyances of modern life, you pull into the wrong side of the pump.
Frank: It’s a good thing though that some of the cars have them on the left and some have them on the right. If you imagine all of them being on the driver side, that means on the right-hand side of the pump there’d be a long line, all the pumps on the left-hand side would be empty. I don’t think manufacturers did it for that reason. If they hadn’t done it this way for whatever reason they did it, then somebody would need to come up with this as a scheme for diffusing the long lines on the one side.
Jagow: When students hear a story like that are they really making a connection between that and economic principles?
Frank: Most of these examples originated from an assignment I give my students called “the economic naturalist writing assignment” and what they have to do is pose an interesting question based on something they’ve actually experienced out there in the world. They’ve got to look for economics at work in their daily lives and then once they’ve posed an interesting question their task is in one page to try and answer it using economic reasoning.
Jagow: What kind of evidence do you have that this actually works for students?
Frank: What we do know is that the conventional approach doesn’t work. The tests given six months later reveal no permanent change in the level of economic knowledge from students who’ve taken the traditional courses. What I can tell you anecdotally is that students come back 10 years later for class reunion and when they stop by to see me the first thing they want to tell me about is the questions they’ve posed and answered. “Why do the Braille dots get put on keypad buttons for drive-up cash machines?” One of my students asked that question. The answer he suggested was really simple, he said once you’ve made the machines with the Braille dots on them for the walk-up locations, it’s just cheaper to make them all the same way rather than keep two inventories and worry about which ones go to which destinations. That’s an interesting story. You can repeat that, people will hear it, they’ll repeat it, everyone’s getting better at thinking in cost-benefit terms when they hear a story like that.
Jagow: Robert Frank, the author of “The Economist Naturalist,” thank you.
Frank: Scott, good to talk with you.
Jagow: In Los Angeles, I’m Scott Jagow. Thanks for listening and enjoy your Monday.
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